Amy Has a Portfolio with a Beta of 1

question 65

Multiple Choice

Amy has a portfolio with a beta of 1.26 but has decided to lower her investment risk.Adding which one of the following securities to her portfolio is most assuredly going to lower the risk of the portfolio?

• A)A stock that has a covariance with the market of 0.89
• B)A security that has a standard deviation of 11 percent
• C)A security with a beta of 1.58
• D)U)S.Treasury bills
• E)A mix of small-company and large-company stocks

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Definitions:

Collections From Customers

The process and activities involved in gathering all payments owed by customers for goods and services sold to them.

Adjustment For Expired Insurance

This is an accounting entry made to reflect the decrease in value of an insurance premium, representing the portion of the insurance cost that has been utilized over time.

Accounts Payable Subsidiary Ledger

A detailed ledger that contains the individual accounts of suppliers and creditors, supplementing the general accounts payable account in the general ledger.

Payments To Creditors

Monetary transactions made to repay debts or amounts owed to suppliers and lenders.